Capital One Reports Second Quarter Earnings Per Share

Tag : flat sheets

MCLEAN, Va., July 17 /PRNewswire-FirstCall/ -- Capital OneFinancial Corporation ( News ) today announced earnings for the second quarter of 2008 were$452.9 million, or $1.21 per share (diluted). Earnings fromcontinuing operations in the second quarter of 2008 were $462.5million, or $1.24 per share. In the second quarter of 2007, thecompany reported earnings of $750.4 million, or $1.89 per share(diluted), and earnings from continuing operations of $767.6million, or $1.93 per share (diluted). Earnings from continuingoperations exclude the loss from discontinued operations related tothe shutdown of GreenPoint Mortgage in August 2007.
HIGHLIGHTS
-- Credit performance in the quarter was largely in line withprevious expectations and reflects expected continued weakening assuggested by US economic indicators.
-- Available liquidity increased in the quarter by $3.0 billion to$33.0 billion.
-- Includes the investment portfolio of $24.7 billion. Theportfolio is comprised of primarily high quality, liquid, AAA-ratedsecurities.
-- Tangible common equity to total managed assets ratio (TCE)increased to 6.18 percent, above the high end of the company'starget range of 5.5 to 6.0 percent, as the company continued togenerate excess capital.
-- Deposits grew $4.7 billion in the second quarter of 2008 to$92.4 billion at June 30, 2008.
-- Managed loans declined $0.8 billion in the second quarter of2008 as a result of tighter underwriting.
"Despite cyclical economic headwinds, the company continues todeliver profits and generate excess capital," said Richard D.Fairbank, Capital One's Chairman and Chief Executive Officer. "Weremain well-positioned to navigate the near-term economicchallenges and to deliver strong shareholder value through thecycle."
Total Company Results
-- Total deposits were up $4.7 billion, or 5.4 percent, to $92.4billion at June 30, 2008 relative to March 31, 2008 and $6.9billion, or 8.1 percent relative to June 30, 2007.
-- Managed loans held for investment of $147.2 billion decreasedfrom the first quarter of 2008 by $790 million, or 0.53 percent,but increased from the year ago quarter by $3.7 billion, or 2.6percent.
-- Managed revenue margin of 9.12 percent in the second quarter of2008 was down 131 basis points compared to 10.43 percent in thefirst quarter of 2008, and down 36 basis points from 9.48 percentin the second quarter of 2007.
-- Managed provision expense was $1.6 billion. The company added$37.6 million to its allowance in the second quarter of 2008. Thisallowance build has the capacity to absorb the equivalent of $7.0billion of managed charge- offs over the next 12 months, endingJune 30, 2009.
-- Excluding the first quarter reversal for $91 million in legalreserves related to the VISA initial public offering, operatingexpenses decreased $44.8 million relative to the first quarter of2008. The managed efficiency ratio for the second quarter of 2008was 44.16 percent, up from 38.61 percent in the first quarter of2008.
"During the quarter, we added to the considerable strength of ourbalance sheet by generating excess capital and increasing ouralready strong liquidity position," said Gary L. Perlin, CapitalOne's Chief Financial Officer. "Going forward, we will continue our37.5 cent quarterly dividend while at the same time maintaining ourTCE ratio above our long-term target range."
Segment Results Local Banking Segment highlights
Results in the Local Banking segment remain solid, however, profitsdeclined as the economy continued to weaken during the quarter. Ona sequential quarter basis, loan and deposit growth wereessentially flat. Rising provision expense in the current economicdownturn is the largest factor in both the sequential quarter andyear-over-year decline. The company expects loan growth to remainflat for the remainder of the year, but expects stronger depositgrowth in the second half of the year.
-- Net income of $67.1 million was down $8.7 million from $75.8million in the first quarter of 2008.
-- Loans held for investment were up $73.6 million relative to thefirst quarter of 2008 to $44.3 billion.
-- Local Banking deposits increased $858.5 million from the firstquarter of 2008 to $74.2 billion.
-- The net charge-off rate of 34 basis points increased from 31basis points in the first quarter of 2008, and non-performing loansas a percent of loans held for investment of 81 basis pointsincreased from 56 basis points in the first quarter of 2008.
National Lending Segment
The U.S. Card subsegment contains the results of the company'sdomestic credit card business, as well as small business lendingand the installment loan business. The Other National Lendingsubsegment contains the results of the company's auto financebusiness and the company's international lending businesses.Components of the Other National Lending subsegment are separatelydisclosed.
-- Profits for the National Lending segment were down 7.8 percentcompared to the first quarter of 2008, and down 37.2 percentrelative to the second quarter of 2007.
-- The managed charge-off rate for the National Lending segmentincreased 33 basis points to 5.67 percent in the second quarter of2008 from 5.34 percent in the first quarter of 2008.
-- The delinquency rate of 4.87 percent in the second quarter of2008 for the National Lending segment increased from 4.73 percentas of March 31, 2008.
U.S. Card highlights
U.S. Card results in the second quarter reflect continued cyclicalcredit worsening and the company's actions to navigate thedownturn. The business remains cautious on loan growth andcontinues to focus its marketing and originations on the parts ofthe U.S. Card market that the company believes provide the bestcombination of risk-adjusted returns and losses. The U.S. Cardbusiness remains well positioned to successfully navigate near-termchallenges and to deliver solid results through the economic cycle.
-- U.S. Card reported net income of $340.4 million, a 30.7 percentdecrease relative to the first quarter of 2008 and a 42.6 percentdecrease relative to the second quarter of 2007.
-- Total revenues decreased $280.7 million, or 10.0 percent,compared to the first quarter of 2008 but increased $126.1 million,or 5.2 percent, over the prior year's same quarter.
-- Non-interest expenses declined 3.0 percent over the previousquarter and 5.7 percent relative to the second quarter of 2007.
-- Managed loans increased from the first quarter of 2008 by 1.0percent, or $678.0 million, to $68.1 billion at June 30, 2008, andincreased 2.3 percent from the year ago quarter.
-- Charge-offs rose in the second quarter of 2008 to 6.26 percentfrom 5.85 percent in the first quarter of 2008, and from 3.56percent in the second quarter of 2007. The company expects thecharge-off rate to be in the low six percent range in the thirdquarter, rising to around seven percent in the fourth quarter.
-- Delinquencies improved in the second quarter of 2008 to 3.85percent from 4.04 percent in the previous quarter but rose from2.98 percent in the year ago quarter.
Auto Finance highlights
The Auto Finance subsegment return to profitability this quarterwas driven by the seasonal improvement in charge-offs, solidrevenue margins, and continuing reductions in operating costs.Beyond this second quarter, the significant cyclical economicchallenges facing the auto finance industry continue to be thelonger term driver of performance in the Auto Finance business.
-- Auto Finance posted net income of $33.6 million in the quarter,compared to a loss of $82.4 million last quarter, and a profit of$38.0 million in the second quarter of 2007.
-- Total revenues decreased $12.4 million, or 3.0 percent, comparedto the first quarter of 2008 but increased $7.9 million, or 2.0percent, over the prior year's same quarter.
-- Non-interest expenses declined 9.7 percent over the previousquarter and 21.7 percent relative to the second quarter of 2007.
-- Net charge-offs of 3.84 percent declined slightly from 3.98percent in the first quarter of 2008 while delinquencies increased120 basis points from the prior quarter to 7.62 percent.
-- Originations in the first quarter of $1.5 billion were down 38.0percent, or $926.5 million, compared to the prior quarter.
-- Managed loans of $23.4 billion as of June 30, 2008 were down 5.0percent relative to the first quarter of 2008 and down 2.8 percentfrom the second quarter of 2007.
International highlights
Continued strong performance in Canada offset trends in the UK,where the credit environment grew more challenging in the secondquarter. Modestly lower revenue, combined with an increase inprovision expense, pressured UK profits in the quarter. TheCanadian credit card business continues to perform well, withstable credit performance and solid returns.
-- International's net income of $33.6 million was relatively flatcompared to $33.3 million in the first quarter of 2008, butincreased $15.4 million from $18.2 million in the year ago quarter.
-- Charge-offs of 6.07 percent increased 77 basis points from 5.30percent in the first quarter of 2008, and 68 basis points from 5.39percent in the second quarter of 2007.
-- Delinquencies increased 23 basis points to 5.35 percent from5.12 percent in the prior quarter and 53 basis points from 4.82percent in the year ago quarter.
The company generates earnings from its managed loan portfolio,which includes both on-balance sheet loans and securitized(off-balance sheet) loans. For this reason, the company believesmanaged financial measures to be useful to stakeholders. Incompliance with Regulation G of the Securities and ExchangeCommission, the company is providing a numerical reconciliation ofmanaged financial measures to comparable measures calculated on areported basis using generally accepted accounting principles(GAAP). Please see the schedule titled "Reconciliation to GAAPFinancial Measures" attached to this release for more information.
Forward looking statements
The company cautions that its current expectations in this release,in the presentation slides available on the company's website andin its Form 8-K dated July 17, 2008 for 2008 revenue growth, loanand deposit growth, return on equity, the projected charge-off rateand revenue margin in the U.S. Card subsegment for 2008, estimatedloss levels for the 12 months ending June 30, 2009 underlying theprovision expense in the second quarter of 2008, credit performanceand trends, operating efficiencies, operating expense reductions,and dividends, including future financial and operating results,and the company's plans, objectives, expectations, and intentions,are forward-looking statements and actual results could differmaterially from current expectations due to a number of factors,including: general economic conditions in the U.S., the UK, or thecompany's local markets, including conditions affecting interestrates and consumer income and confidence, spending, and savingswhich may affect consumer bankruptcies, defaults, charge-offs anddeposit activity; changes in the labor and employment market;changes in the credit environment; the company's ability to executeon its strategic and operational plans; competition from providersof products and services that compete with the company'sbusinesses; increases or decreases in the company's aggregateaccounts and balances, or the growth rate or composition thereof;the risk that the benefits of the company's cost savings initiativemay not be fully realized; changes in the reputation of orexpectations regarding the financial services industry or thecompany with respect to practices, products or financial condition;financial, legal, regulatory, tax or accounting changes or actions,including with respect to any litigation matter involving thecompany; and the success of the company's marketing efforts inattracting or retaining customers. A discussion of these and otherfactors can be found in the company's annual report and otherreports filed with the Securities and Exchange Commission,including, but not limited to, the company's report on Form 10-Kfor the fiscal year ended December 31, 2007 and report on Form 10-Qfor the quarter ended March 31, 2008.
About Capital One
Capital One Financial Corporation (). Choose "Investors" on thebottom of the home page to view and download the earnings pressrelease, slides, and other financial information. Additionally, apodcast and webcast of today's 5:00 pm (ET) earnings conferencecall is accessible through the same link.
CAPITAL ONE FINANCIAL CORPORATION (COF) FINANCIAL&STATISTICALSUMMARY REPORTED BASIS (in millions, except per share 2008 20082007 data and as noted) Q2 Q1 Q2 Earnings (Reported Basis) NetInterest Income $1,727.8 $1,811.9 $1,538.6 (7) Non-Interest Income1,622.3 (2)(13) 2,056.5 (2)(10)(11) 1,971.9 Total Revenue (1)3,350.1 3,868.4 3,510.5 Provision for Loan Losses 829.1 1,079.1396.7 Marketing Expenses 288.1 297.8 326.1 Restructuring Expenses13.6 52.8 91.1 Operating Expenses (3) 1,517.9 1,471.7 (4) 1,617.4(8) Income Before Taxes 701.4 967.0 1,079.2 Tax Rate 34.1% 34.6%28.9%(5) Income From Continuing Operations, Net of Tax $462.5$632.6 $767.6 Loss From Discontinued Operations, Net of Tax (6)(9.6) (84.1)(12) (17.2) Net Income (Loss) $452.9 $548.5 $750.4Common Share Statistics Basic EPS: Income From ContinuingOperations $1.24 $1.71 $1.96 Loss From Discontinued Operations$(0.03) $(0.23) $(0.04) Net Income (Loss) $1.21 $1.48 $1.92 DilutedEPS: Income From Continuing Operations $1.24 $1.70 $1.93 Loss FromDiscontinued Operations $(0.03) $(0.23) $(0.04) Net Income (Loss)$1.21 $1.47 $1.89 Dividends Per Share $0.375 $0.375 $0.03 TangibleBook Value Per Share (period end) $30.77 $29.94 $29.11 Stock PricePer Share (period end) $38.01 $49.22 $78.44 Total MarketCapitalization (period end) $14,280.4 $18,442.7 $30,701.4 SharesOutstanding (period end) 375.7 374.7 391.4 Shares Used to ComputeBasic EPS 372.3 370.7 390.8 Shares Used to Compute Diluted EPS373.7 372.3 397.5 Reported Balance Sheet Statistics (periodaverage)(A) Average Loans Held for Investment $97,950 $99,819$91,145 Average Earning Assets $131,629 $127,820 $119,430 AverageAssets $154,288 $149,460 $142,690 Average Interest Bearing Deposits$78,675 $74,167 $75,024 Total Average Deposits $89,522 $84,779$86,525 Average Equity $24,839 $24,569 $25,128 Return on AverageAssets (ROA) 1.20% 1.69% 2.15% Return on Average Equity (ROE) 7.45%10.30% 12.22% Reported Balance Sheet Statistics (period end) (A)Loans Held for Investment $97,065 $98,356 $90,930 Total Assets$150,978 $150,428 $141,917 Interest Bearing Deposits $81,655$76,624 $74,235 Total Deposits $92,407 $87,695 $85,471 PerformanceStatistics (Reported) (A) Net Interest Income Growth (annualized)(19)% 11% (16)% Non Interest Income Growth (annualized) (84)% (19)%45% Revenue Growth (annualized) (54)% (5)% 16% Net Interest Margin5.25% 5.67% 5.15% Revenue Margin 10.18% 12.11% 11.76% Risk AdjustedMargin (B) 7.77% 9.71% 10.41% Non Interest Expense as a % ofAverage Loans Held for Investment (annualized) 7.43% 7.30% 8.93%Efficiency Ratio (C) 53.91% 45.74% 55.36% Asset Quality Statistics(Reported) (A) Allowance $3,311 $3,273 $2,113 Allowance as a % ofReported Loans Held for Investment 3.41% 3.33% 2.32% NetCharge-Offs $793 $767 $401 Net Charge-Off Rate 3.24% 3.07% 1.76%(9)Full-time equivalent employees (in thousands) 24.0 25.4 29.5CAPITAL ONE FINANCIAL CORPORATION (COF) FINANCIAL&STATISTICALSUMMARY MANAGED BASIS (*) 2008 2008 2007 (in millions) Q2 Q1 Q2Earnings (Managed Basis) Net Interest Income $2,788.0 $2,976.8$2,613.3 (7) Non-Interest Income 1,302.0 (2)(13) 1,606.7(2)(10)(11) 1,387.5 Total Revenue (1) 4,090.0 4,583.5 4,000.8Provision for Loan Losses 1,569.0 1,794.2 887.1 Marketing Expenses288.1 297.8 326.1 Restructuring Expenses 13.6 52.8 91.1 OperatingExpenses (3) 1,517.9 1,471.7 (4) 1,617.4 (8) Income Before Taxes701.4 967.0 1,079.1 Tax Rate 34.1% 34.6% 28.9 (5) Income FromContinuing Operations, Net of Tax $462.5 $632.6 $767.6 Loss FromDiscontinued Operations, Net of Tax (6) (9.6) (84.1)(12) (17.2) NetIncome (Loss) $452.9 $548.5 $750.4 Managed Balance Sheet Statistics(period average) (A) Average Loans Held for Investment $147,716$149,719 $142,616 Average Earning Assets $179,421 $175,709 $168,841Average Assets $203,308 $198,516 $193,446 Return on Average Assets(ROA) 0.91% 1.27% 1.59% Managed Balance Sheet Statistics (periodend) (A) Loans Held for Investment $147,247 $148,037 $143,498 TotalAssets $200,420 $199,362 $193,682 Tangible Assets(D) $187,059$185,962 $179,888 Tangible Common Equity (E) $11,560 $11,220$11,393 Tangible Common Equity to Tangible Assets Ratio 6.18% 6.03%6.33% % Off-Balance Sheet Securitizations 34% 34% 37% PerformanceStatistics (Managed) (A) Net Interest Income Growth (annualized)(25)% (3)% 47% Non Interest Income Growth (annualized) (76)% 10%59% Revenue Growth (annualized) (43)% 1% 51% Net Interest Margin6.22% 6.78% 6.19% Revenue Margin 9.12% 10.43% 9.48% Risk AdjustedMargin (B) 5.70% 7.06% 7.37% Non Interest Expense as a % of AverageLoans Held for Investment (annualized) 4.93% 4.87% 5.71% EfficiencyRatio (C) 44.16% 38.61% 48.58% Asset Quality Statistics (Managed)(A) Net Charge-Offs $1,533 $1,482 $891 Net Charge-Off Rate 4.15%3.96% 2.50%(9)
(*) The information in this statistical summary reflects theadjustment to add back the effect of securitization transactionsqualifying as sales under generally accepted accounting principles.See accompanying schedule - "Reconciliation to GAAP FinancialMeasures".
CAPITAL ONE FINANCIAL CORPORATION (COF) FINANCIAL&STATISTICALSUMMARY NOTES
(1) In accordance with the Company's finance charge and fee revenuerecognition policy, the amounts billed to customers but notrecognized as revenue were as follows: Q2 2008 - $476.0 million, Q12008 - $407.6 million, and Q2 2007 - $236.3 million.
(2) In Q2 2008 the Company recorded a decrease to its interest-onlystrips of $71.0 million. In Q1 2008 the Company recorded anincrease of $42.8 million to its interest-only strips.
(3) Includes core deposit intangible amortization expense of $48.5million in Q2 2008, $49.8 million in Q1 2008, and $53.7 million inQ2 2007 and integration costs of $31.4 million in Q2 2008, $29.6million in Q1 2008, and $24.5 million in Q2 2007.
(4) In Q1 2008, the Company, in connection with the Visa initialpublic offering (IPO), reversed approximately $91 million of theselegal liabilities.
(5) Includes a $69.0 million benefit in Q2 2007 resulting fromchanges in the Company's international tax position and taxbenefits from resolution of tax issues.
(6) In Q3 2007, the Company shutdown the mortgage originationoperations of its wholesale mortgage banking unit, GreenPointMortgage, realizing an after tax loss of $898.0 million. Theresults of the mortgage origination operation of GreenPoint havebeen accounted for as a discontinued operation and have beenremoved from the Company's results of continuing operations for allperiods presented. The results of GreenPoint's mortgage servicingbusiness are reported in continuing operations for all periodspresented. Effective Q4 2007, GreenPoint's held for investmentcommercial and consumer loan portfolio results are included incontinuing operations.
(7) Includes a $17.4 million gain from the early extinguishment ofTrust Preferred Securities in Q2 2007 included as a component ofinterest expense.
(8) Includes a charge of $39.8 million as a result of theaccelerated vesting of equity awards made in connection with thetransition of the management team for Capital One's Local Bankingbusiness following the acquisition of North Fork.
(9) Managed and reported net charge-off rate for Q2 2007 waspositively impacted 11 and 17 basis points, respectively, due tothe implementation of a change in customer statement generationfrom 30 to 25 days grace. The change did not have a material impacton provision for loan losses for Q2 2007.
(10) In Q1 2008 the Company recorded a gain of $109.0 million innon- interest income from the redemption of 2.5 million sharesrelated to the Visa IPO.
(11) In Q1 2008 the Company repurchased approximately $1.0 billionof certain senior unsecured debt, recognizing a gain of $52.0million in non- interest income. The Company initiated therepurchases to take advantage of the current rate environment andreplaced the borrowings with lower-rate unsecured funding.
(12) In Q1 2008 the Company recorded a pre-tax expense of $104.2million in discontinued operations to cover expected future claimsmade under representations and warranties provided by the Companyon loans previously sold to third parties by GreenPoint's mortgageorigination operation. See also note (6) above.
(13) In Q2 2008 the Company elected to convert and sell 154,991shares of MasterCard class B common stock. The Company recognizedgains of $44.9 million in non-interest income from thistransaction.
STATISTICS / METRIC DEFINITIONS
(A) Based on continuing operations. Average equity and return onequity are based on the Company's stockholders' equity.
(B) Risk adjusted margin equals total revenue less net charge-offsas a percentage of average earning assets.
(C) Efficiency ratio equals non-interest expense less restructuringexpense divided by total revenue.
(D) Tangible assets include managed assets less intangible assets.
(E) Includes stockholders' equity and preferred interests lessintangible assets and related deferred tax liabilities. TangibleCommon Equity on a reported and managed basis is the same.
CAPITAL ONE FINANCIAL CORPORATION (COF) SEGMENTFINANCIAL&STATISTICAL SUMMARY FOR CONTINUING OPERATIONS MANAGEDBASIS (1) 2008 2008 2007 (in thousands) Q2 Q1 Q2 (7) Local Banking:Interest Income $1,489,612 $1,575,325 $1,731,833 Interest Expense899,907 1,008,371 1,143,674 Net interest income $589,705 $566,954$588,159 Non-interest income 192,758 215,469 254,401 Provision forloan losses 92,043 60,394 23,929 Other non-interest expenses587,211 605,351 580,788 Income tax provision 36,123 40,837 83,046Net income $67,086 $75,841 $154,797 Loans Held for Investment$44,270,734 $44,197,085 $41,919,645 Average Loans Held forInvestment $44,250,451 $43,887,387 $42,110,537 Core Deposits(2)$63,407,571 $62,811,696 $63,619,337 Total Deposits $74,245,677$73,387,227 $74,273,736 Loans Held for Investment Yield 6.35% 6.75%7.03% Net Interest Margin - Loans (3) 1.99% 1.92% 1.88% NetInterest Margin - Deposits (4) 2.04% 1.93% 2.01% Efficiency Ratio(6) 75.05% 77.37% 68.93% Net charge-off rate 0.34% 0.31% 0.19% NonPerforming Loans $359,017 $249,055 $80,781 Non Performing Loans asa % of Loans Held for Investment 0.81% 0.56% 0.19% Non-InterestExpenses as a % of Average Loans Held for Investment 5.31% 5.52%5.52% Number of Active ATMs 1,303 1,297 1,253 Number of Locations740 745 724 National Lending (10): Interest Income $3,181,773$3,530,017 $3,253,448 Interest Expense 1,014,244 1,121,4341,193,205 Net interest income $2,167,529 $2,408,583 $2,060,243Non-interest income 1,164,810 1,226,114 1,133,318 Provision forloan losses 1,470,642 1,677,220 869,149 Other non-interest expenses1,236,567 1,279,171 1,333,956 Income tax provision 217,496 236,203341,323 Net income $407,634 $442,103 $649,133 Loans Held forInvestment $102,201,802 $103,003,402 $101,590,039 Average LoansHeld for Investment $102,629,246 $104,973,633 $100,520,138 CoreDeposits(2) $1,954 $2,171 $1,124 Total Deposits $1,644,241$1,774,690 $2,411,435 Loans Held for Investment Yield 12.40% 13.45%12.95% Net Interest Margin 8.45% 9.18% 8.20% Revenue Margin 12.99%13.85% 12.71% Risk Adjusted Margin 7.31% 8.51% 9.24% Non-InterestExpenses as a % of Average Loans Held for Investment 4.82% 4.87%5.31% Efficiency Ratio (6) 37.11% 35.19% 41.77% Net charge-off rate5.67% 5.34% 3.47% (5) Delinquency Rate (30+ days) 4.87% 4.73% 3.89%Number of Loan Accounts (000s) 45,812 48,065 48,536 Other: Netinterest income $30,761 $1,313 $(35,057) Non-interest income(55,594) 165,102 (248) Provision for loan losses 6,342 56,598(5,981) Restructuring expenses 13,560 52,759 91,074 Othernon-interest expenses (17,737) (115,004) 28,717 Income taxprovision (benefit) (14,776) 57,451 (112,797) Net income (loss)$(12,222) $114,611 $(36,318) Loans Held for Investment $774,424$836,041 $(11,928) Core Deposits(2) $14,800,701 $10,729,004$6,937,760 Total Deposits $16,517,143 $12,533,025 $8,786,315 Total:Interest Income $4,270,571 $4,628,257 $4,380,376 Interest Expense1,482,577 1,651,407 1,767,031 Net interest income $2,787,994$2,976,850 $2,613,345 Non-interest income 1,301,974 1,606,6851,387,471 Provision for loan losses 1,569,027 1,794,212 887,097Restructuring expenses 13,560 52,759 91,074 Other non-interestexpenses 1,806,041 1,769,518 1,943,461 Income tax provision 238,843334,491 311,572 Net Income $462,497 $632,555 $767,612 Loans Heldfor Investment $147,246,960 $148,036,528 $143,497,756 CoreDeposits(2) $78,210,226 $73,542,871 $70,558,221 Total Deposits$92,407,061 $87,694,942 $85,471,486 CAPITAL ONE FINANCIALCORPORATION (COF) LOCAL BANKING SEGMENT FINANCIAL&STATISTICALINFORMATION 2008 2008 2007 (in thousands) Q2 Q1 Q4 Loans Held forInvestment: Commercial Lending Commercial and Multi-Family RealEstate $12,706,320 $12,501,332 $12,381,563 Middle Market 9,215,5118,891,537 8,377,834 Small Ticket Commercial Real Estate 2,770,2492,879,933 2,956,785 Specialty Lending 3,684,688 3,514,267 3,391,604Total Commercial Lending $28,376,768 $27,787,069 $27,107,786 SmallBusiness Lending $4,833,514 $4,890,459 $4,964,959 Consumer LendingMortgages $7,654,722 $8,092,105 $8,409,821 Branch Based HomeEquity&Other Consumer 3,475,649 3,524,261 3,621,516 Total ConsumerLending $11,130,371 $11,616,366 $12,031,337 Other $(69,919)$(96,809) $(131,287) Total Loans Held for Investment $44,270,734$44,197,085 $43,972,795 Non Performing Asset Rates(1): CommercialLending Commercial and Multi-Family Real Estate 0.89% 0.47% 0.24%Middle Market 0.30% 0.41% 0.41% Small Ticket Commercial Real Estate2.71% 1.59% 0.54% Specialty Lending 0.25% 0.18% 0.18% TotalCommercial Lending 0.79% 0.53% 0.32% Small Business Lending 1.10%0.94% 0.99% Consumer Lending Mortgages 1.25% 0.82% 0.54% BranchBased Home Equity&Other Consumer 0.43% 0.39% 0.34% Total ConsumerLending 0.99% 0.69% 0.48% Total Non Performing Asset Rate 0.88%0.62% 0.44% Net Charge Off Rates: Commercial Lending Commercial andMulti-Family Real Estate 0.10% 0.02% 0.02% Middle Market 0.05%0.15% 0.12% Small Ticket Commercial Real Estate 0.00% 0.31% 0.20%Specialty Lending 0.04% 0.01% 0.04% Total Commercial Lending 0.08%0.09% 0.09% Small Business Lending 0.91% 0.97% 0.63% ConsumerLending Mortgages 0.36% 0.11% 0.18% Branch Based Home Equity&OtherConsumer 1.15% 1.34% 1.17% Total Consumer Lending 0.60% 0.48% 0.48%Total Net Charge Off Rate 0.34% 0.31% 0.28%
(1) Non performing asset rates include foreclosed assets of $30million for Q2 2008, $20 million for Q1 2008 and $15 million for Q42007
CAPITAL ONE FINANCIAL CORPORATION (COF) NATIONAL LENDING SUBSEGMENTFINANCIAL&STATISTICAL SUMMARY FOR CONTINUING OPERATIONS MANAGEDBASIS (1), (10) 2008 2008 2007 (in thousands) Q2 Q1 Q2 (7) US Card:Interest Income $2,132,284 $2,433,665 $2,214,408 Interest Expense608,655 689,951 778,576 Net interest income $1,523,629 $1,743,714$1,435,832 Non-interest income 1,010,177 1,070,831 971,894Provision for loan losses 1,099,453 1,120,025 538,379 Non-interestexpenses 910,619 938,860 965,556 Income tax provision 183,307264,481 310,904 Net income $340,427 $491,179 $592,887 Loans Heldfor Investment $68,059,998 $67,382,004 $66,539,623 Average LoansHeld for Investment $67,762,384 $68,544,190 $65,639,360 Loans Heldfor Investment Yield 12.59% 14.20% 13.49% Net Interest Margin 8.99%10.18% 8.75% Revenue Margin 14.96% 16.42% 14.67% Risk AdjustedMargin 8.70% 10.58% 11.11% Non-Interest Expenses as a % of AverageLoans Held for Investment 5.38% 5.48% 5.88% Efficiency Ratio (6)35.94% 33.36% 40.10% Net charge-off rate 6.26% 5.85% 3.56% (9)Delinquency Rate (30+ days) 3.85% 4.04% 2.98% Purchase Volume (8)$26,738,213 $24,543,082 $26,940,397 Number of Loan Accounts (000s)38,415 40,611 41,174 Auto Finance: Interest Income $666,499$690,919 $651,821 Interest Expense 276,911 289,357 277,783 Netinterest income $389,588 $401,562 $374,038 Non-interest income15,672 16,110 23,273 Provision for loan losses 230,614 408,251182,278 Non-interest expenses 123,021 136,169 157,044 Income tax(benefit) provision 18,069 (44,362) 19,948 Net (loss) income$33,556 $(82,386) $38,041 Loans Held for Investment $23,401,160$24,633,665 $24,067,760 Average Loans Held for Investment$24,098,881 $25,047,501 $23,898,070 Loans Held for Investment Yield11.06% 11.03% 10.91% Net Interest Margin 6.47% 6.41% 6.26% RevenueMargin 6.73% 6.67% 6.65% Risk Adjusted Margin 2.88% 2.69% 4.30%Non-Interest Expenses as a % of Average Loans Held for Investment2.04% 2.17% 2.63% Efficiency Ratio (6) 30.36% 32.60% 39.53% Netcharge-off rate 3.84% 3.98% 2.35% Delinquency Rate (30+ days) 7.62%6.42% 6.00% Auto Loan Originations $1,513,686 $2,440,227 $2,992,427Number of Loan Accounts (000s) 1,710 1,763 1,771 International:Interest Income $382,990 $405,433 $387,219 Interest Expense 128,678142,126 136,846 Net interest income $254,312 $263,307 $250,373Non-interest income 138,961 139,173 138,151 Provision for loanlosses 140,575 148,944 148,492 Non-interest expenses 202,927204,142 211,356 Income tax provision 16,120 16,084 10,471 Netincome $33,651 $33,310 $18,205 Loans Held for Investment$10,740,644 $10,987,733 $10,982,656 Average Loans Held forInvestment $10,767,981 $11,381,942 $10,982,708 Loans Held forInvestment Yield 14.23% 14.25% 14.10% Net Interest Margin 9.45%9.25% 9.12% Revenue Margin 14.61% 14.14% 14.15% Risk AdjustedMargin 8.54% 8.84% 8.77% Non-Interest Expenses as a % of AverageLoans Held for Investment 7.54% 7.17% 7.70% Efficiency Ratio (6)51.60% 50.72% 54.40% Net charge-off rate 6.07% 5.30% 5.39%Delinquency Rate (30+ days) 5.35% 5.12% 4.82% Purchase Volume (8)$2,879,223 $2,716,060 $2,094,280 Number of Loan Accounts (000s)5,687 5,691 5,591 CAPITAL ONE FINANCIAL CORPORATION (COF) SEGMENTAND NATIONAL LENDING SUBSEGMENT FINANCIAL&STATISTICAL SUMMARY FORCONTINUING OPERATIONS NOTES
(1) The information in this statistical summary reflects theadjustment to add back the effect of securitization transactionsqualifying as sales under generally accepted accounting principles.See accompanying schedule - "Reconciliation to GAAP FinancialMeasures." In Q3 2007, the Company shutdown the mortgageorigination operations of its wholesale mortgage banking unit,GreenPoint Mortgage. The results of the mortgage originationoperation of GreenPoint have been accounted for as a discontinuedoperation and have been removed from the Company's results ofcontinuing operations for all periods presented. The results ofGreenPoint's mortgage servicing business are reported in continuingoperations for all periods presented. Effective Q4 2007,GreenPoint's held for investment commercial and consumer loanportfolio results are included in continuing operations.
(2) Includes domestic non-interest bearing deposits, NOW accounts,money market deposit accounts, savings accounts, certificates ofdeposit of less than $100,000 and other consumer time deposits.
(3) Net Interest Margin - Loans equals net interest income earnedon loans divided by average managed loans.
(4) Net Interest Margin - Deposits equals net interest incomeearned on deposits divided by average retail deposits.
(5) Net charge-off rate for Q2 2007 was positively impacted by 16basis points due to the implementation of a change in customerstatement generation from 30 to 25 days grace. This change did nothave a material impact on the provision for the quarter.
(6) Efficiency Ratio equals non-interest expenses divided by totalmanaged revenue.
(7) Certain prior period amounts have been reclassified to conformwith current period presentation.
(8) Includes all purchase transactions net of returns and excludescash advance transactions.
(9) Net charge-off rate for Q2 2007 was positively impacted by 31basis points due to the implementation of a change in customerstatement generation from 30 to 25 days grace. This change did nothave a material impact on the provision for the quarter.
(10) In Q1 2008 the Company reorganized its National Lendingsubsegments from U.S. Card, Auto Finance and Global FinancialServices to U.S. Card and Other National Lending. The U.S. Cardsubsegment contains the results of the Company's domestic creditcard business, small business lending and the installment loanbusiness. The Other National Lending subsegment contains theresults of the Company's auto finance business and the Company'sinternational lending businesses. Components of the Other NationalLending subsegment are separately disclosed. Segment and subsegmentresults have been restated for all periods presented.
CAPITAL ONE FINANCIAL CORPORATION Reconciliation to GAAP FinancialMeasures For the Three Months Ended June 30, 2008 (dollars inthousands)(unaudited)
The Company's consolidated financial statements prepared inaccordance with generally accepted accounting principles ("GAAP")are referred to as its "reported" financial statements. Loansincluded in securitization transactions which qualified as salesunder GAAP have been removed from the Company's "reported" balancesheet. However, servicing fees, finance charges, and other fees,net of charge-offs, and interest paid to investors ofsecuritizations are recognized as servicing and securitizationsincome on the "reported" income statement.
The Company's "managed" consolidated financial statements reflectadjustments made related to effects of securitization transactionsqualifying as sales under GAAP. The Company generates earnings fromits "managed" loan portfolio which includes both the on-balancesheet loans and off-balance sheet loans. The Company's "managed"income statement takes the components of the servicing andsecuritizations income generated from the securitized portfolio anddistributes the revenue and expense to appropriate income statementline items from which it originated. For this reason the Companybelieves the "managed" consolidated financial statements andrelated managed metrics to be useful to stakeholders.
Total Total Reported Adjustments(1) Managed(2) Income StatementMeasures(3) Net interest income $1,727,756 $1,060,238 $2,787,994Non-interest income 1,622,316 (320,341) 1,301,975 Total revenue3,350,072 739,897 4,089,969 Provision for loan and lease losses829,130 739,897 1,569,027 Net charge-offs $793,048 $739,897$1,532,945 Balance Sheet Measures Loans held for investment$97,065,238 $50,182,022 $147,247,260 Total assets $151,114,271$49,442,148 $200,556,419 Average loans held for investment$97,949,572 $49,766,121 $147,715,693 Average earning assets$131,681,294 $47,791,504 $179,472,798 Average total assets$154,706,392 $49,020,229 $203,726,621 Delinquencies $3,330,151$2,031,479 $5,361,630
(1) Income statement adjustments reclassify the net of financecharges of $1,385.3 million, past-due fees of $229.2 million, otherinterest income of $(35.8) million and interest expense of $518.5million; and net charge-offs of $739.9 million from non-interestincome to net interest income and provision for loan and leaselosses, respectively.
(2) The managed loan portfolio does not include auto loans whichhave been sold in whole loan sale transactions where the Companyhas retained servicing rights.
(3) Based on continuing operations. CAPITAL ONE FINANCIALCORPORATION Consolidated Statements of Income (in thousands, exceptper share data)(unaudited) Three Months Ended June 30 March 31 June30 2008 2008 2007 (1) Interest Income: Loans held for investment,including past-due fees $2,297,709 $2,508,393 $2,255,573 Securitiesavailable for sale 281,089 257,747 237,978 Other 113,059 113,385145,135 Total interest income 2,691,857 2,879,525 2,638,686Interest Expense: Deposits 592,576 610,389 749,603 Senior andsubordinated notes 114,797 140,970 134,061 Other borrowings 256,728316,249 216,441 Total interest expense 964,101 1,067,608 1,100,105Net interest income 1,727,756 1,811,917 1,538,581 Provision forloan and lease losses 829,130 1,079,072 396,713 Net interest incomeafter provision for loan and lease losses 898,626 732,845 1,141,868Non-Interest Income: Servicing and securitizations 834,7401,083,062 1,226,896 Service charges and other customer- relatedfees 524,209 574,061 482,979 Mortgage servicing and other 16,55235,255 103,653 Interchange 132,730 151,902 125,979 Other 114,085212,198 32,344 Total non-interest income 1,622,316 2,056,4781,971,851 Non-Interest Expense: Salaries and associate benefits578,572 611,280 667,904 Marketing 288,100 297,793 326,067Communications and data processing 195,102 187,243 192,620 Suppliesand equipment 131,937 130,931 116,434 Occupancy 80,137 88,08075,843 Restructuring expense 13,560 52,759 91,074 Other 532,193454,191 564,593 Total non-interest expense 1,819,601 1,822,2772,034,535 Income from continuing operations before income taxes701,341 967,046 1,079,184 Income taxes 238,843 334,491 311,572Income from continuing operations, net of tax 462,498 632,555767,612 Loss from discontinued operations, net of tax(2) (9,593)(84,051) (17,240) Net income $452,905 $548,504 $750,372 Basicearnings per share Income from continuing operations $1.24 $1.71$1.96 Loss from discontinued operations (0.03) (0.23) (0.04) Netincome $1.21 $1.48 $1.92 Diluted earnings per share Income fromcontinuing operations $1.24 $1.70 $1.93 Loss from discontinuedoperations (0.03) (0.23) (0.04) Net income $1.21 $1.47 $1.89Dividends paid per share $0.375 $0.375 $0.03 Six Months Ended June30 June 30 2008 2007(1) Interest Income: Loans held for investment,including past-due fees $4,806,102 $4,582,253 Securities availablefor sale 538,836 442,058 Other 226,444 326,684 Total interestincome 5,571,382 5,350,995 Interest Expense: Deposits 1,202,9651,480,086 Senior and subordinated notes 255,767 272,607 Otherborrowings 572,977 455,178 Total interest expense 2,031,7092,207,871 Net interest income 3,539,673 3,143,124 Provision forloan and lease losses 1,908,202 746,758 Net interest income afterprovision for loan and lease losses 1,631,471 2,396,366Non-Interest Income: Servicing and securitizations 1,917,8022,214,978 Service charges and other customer- related fees1,098,270 962,446 Mortgage servicing and other 51,807 155,103Interchange 284,632 244,090 Other 326,283 169,604 Totalnon-interest income 3,678,794 3,746,221 Non-Interest Expense:Salaries and associate benefits 1,189,852 1,343,075 Marketing585,893 656,961 Communications and data processing 382,345 374,854Supplies and equipment 262,868 250,332 Occupancy 168,217 153,238Restructuring expense 66,319 91,074 Other 986,384 1,139,048 Totalnon-interest expense 3,641,878 4,008,582 Income from continuingoperations before income taxes 1,668,387 2,134,005 Income taxes573,334 680,269 Income from continuing operations, net of tax1,095,053 1,453,736 Loss from discontinued operations, net oftax(2) (93,644) (28,314) Net income $1,001,409 $1,425,422 Basicearnings per share Income from continuing operations $2.95 $3.64Loss from discontinued operations (0.25) (0.07) Net income $2.70$3.57 Diluted earnings per share Income from continuing operations$2.94 $3.58 Loss from discontinued operations (0.25) (0.07) Netincome $2.69 $3.51 Dividends paid per share $0.75 $0.05
(1) Certain prior period amounts have been reclassified to conformto the current period presentation.
(2) In Q3 2007, the Company shutdown the mortgage originationoperations of its wholesale mortgage banking unit, GreenPointMortgage. The results of the mortgage origination operation ofGreenPoint have been accounted for as a discontinued operation andhave been removed from the Company's results of continuingoperations for all periods presented.
CAPITAL ONE FINANCIAL CORPORATION Consolidated Balance Sheets (inthousands)(unaudited) As of As of As of June 30 March 31 June 302008 2008 2007 (1) Assets: Cash and due from banks $2,280,244$2,324,079 $2,354,393 Federal funds sold and resale agreements1,526,799 1,842,775 3,940,269 Interest-bearing deposits at otherbanks 717,572 663,150 753,160 Cash and cash equivalents 4,524,6154,830,004 7,047,822 Securities available for sale 25,028,85322,190,739 20,203,381 Mortgage loans held for sale 111,824 192,5842,732,044 Loans held for investment 97,065,238 98,356,08891,617,353 Less: Allowance for loan and lease losses (3,311,003)(3,273,355) (2,120,000) Net loans held for investment 93,754,23595,082,733 89,497,353 Accounts receivable from securitizations5,301,906 5,396,943 5,481,686 Premises and equipment, net 2,321,4872,316,233 2,260,928 Interest receivable 778,595 750,319 768,617Goodwill 12,826,738 12,826,419 13,612,005 Other 6,466,018 7,022,5534,334,121 Total assets $151,114,271 $150,608,527 $145,937,957Liabilities: Non-interest-bearing deposits $10,752,059 $11,071,116$11,236,110 Interest-bearing deposits 81,655,001 76,623,82674,235,376 Senior and subordinated notes 8,506,339 9,834,3929,222,506 Other borrowings 19,302,185 21,673,670 20,890,258Interest payable 621,489 509,278 543,805 Other 5,355,733 6,276,7184,623,241 Total liabilities 126,192,806 125,989,000 120,751,296Stockholders' Equity: Common stock 4,223 4,213 4,174 Paid-incapital, net 15,966,810 15,918,230 15,682,009 Retained earnings andcumulative other comprehensive income 12,115,480 11,860,28811,386,625 Less: Treasury stock, at cost (3,165,048) (3,163,204)(1,886,147) Total stockholders' equity 24,921,465 24,619,52725,186,661 Total liabilities and stockholders' equity $151,114,271$150,608,527 $145,937,957 (1) Certain prior period amounts havebeen reclassified to conform to the current period presentation.CAPITAL ONE FINANCIAL CORPORATION Statements of Average Balances,Income and Expense, Yields and Rates (dollars inthousands)(unaudited) Reported Quarter Ended 6/30/08 AverageIncome/ Yield/ Balance Expense Rate Earning assets: Loans held forinvestment $97,949,572 $2,297,709 9.38% Securities available forsale 24,165,577 281,089 4.65% Other 9,513,873 113,059 4.75% Totalearning assets (2) $131,629,022 $2,691,857 8.18% Interest-bearingliabilities: Interest-bearing deposits NOW accounts $1,550,149$5,921 1.53% Money market deposit accounts 32,100,584 184,752 2.30%Savings accounts 8,191,586 19,521 0.95% Other Consumer TimeDeposits 22,676,841 243,921 4.30% Public Fund CD's of $100,000 ormore 1,476,155 10,313 2.79% CD's of $100,000 or more 9,124,58698,516 4.32% Foreign time deposits 3,555,189 29,632 3.33% TotalInterest-bearing deposits $78,675,090 $592,576 3.01% Senior andsubordinated notes 9,125,017 114,797 5.03% Other borrowings24,851,821 256,728 4.13% Total interest-bearing liabilities (2)$112,651,928 $964,101 3.42% Net interest spread 4.76% Interestincome to average earning assets 8.18% Interest expense to averageearning assets 2.93% Net interest margin 5.25% Reported QuarterEnded 3/31/08 Average Income/ Yield/ Balance Expense Rate Earningassets: Loans held for investment $99,818,867 $2,508,393 10.05%Securities available for sale 21,211,356 257,747 4.86% Other6,789,537 113,385 6.68% Total earning assets (2) $127,819,760$2,879,525 9.01% Interest-bearing liabilities: Interest-bearingdeposits NOW accounts $3,958,482 $17,714 1.79% Money market depositaccounts 29,636,896 211,436 2.85% Savings accounts 8,064,412 24,0081.19% Other Consumer Time Deposits 18,429,463 204,942 4.45% PublicFund CD's of $100,000 or more 1,671,936 15,718 3.76% CD's of$100,000 or more 8,756,978 99,264 4.53% Foreign time deposits3,648,797 37,307 4.09% Total Interest-bearing deposits $74,166,964$610,389 3.29% Senior and subordinated notes 10,099,878 140,9705.58% Other borrowings 25,449,240 316,249 4.97% Totalinterest-bearing liabilities(2) $109,716,082 $1,067,608 3.89% Netinterest spread 5.12% Interest income to average earning assets9.01% Interest expense to average earning assets 3.34% Net interestmargin 5.67% Reported Quarter Ended 6/30/07 (1) Average Income/Yield/ Balance Expense Rate Earning assets: Loans held forinvestment 91,144,738 2,255,573 9.90% Securities available for sale19,349,938 237,978 4.92% Other 8,935,393 145,135 6.50% Totalearning assets (2) $119,430,069 $2,638,686 8.84% Interest-bearingliabilities: Interest-bearing deposits NOW accounts $5,115,994$36,764 2.87% Money market deposit accounts 27,418,203 276,0384.03% Savings accounts 8,409,684 36,294 1.73% Other Consumer TimeDeposits 18,494,150 217,700 4.71% Public Fund CD's of $100,000 ormore 1,981,883 24,290 4.90% CD's of $100,000 or more 9,609,949107,491 4.47% Foreign time deposits 3,994,639 51,026 5.11% TotalInterest-bearing deposits $75,024,502 $749,603 4.00% Senior andsubordinated notes 9,336,130 134,061 5.74% Other borrowings17,318,770 216,441 5.00% Total interest-bearing liabilities(2)$101,679,402 $1,100,105 4.33% Net interest spread 4.51% Interestincome to average earning assets 8.84% Interest expense to averageearning assets 3.68% Net interest margin 5.15%
(1) Prior period amounts have been reclassified to conform withcurrent period presentation.
(2) Average balances, income and expenses, yields and rates arebased on continuing operations.
CAPITAL ONE FINANCIAL CORPORATION Statements of Average Balances,Income and Expense, Yields and Rates (dollars inthousands)(unaudited) Managed (1) Quarter Ended 6/30/08 AverageIncome/ Yield/ Balance Expense Rate Earning assets: Loans held forinvestment $147,715,693 $3,929,069 10.64% Securities available forsale 24,165,577 281,089 4.65% Other 7,539,256 60,414 3.21% Totalearning assets (3) $179,420,526 $4,270,572 9.52% Interest-bearingliabilities: Interest-bearing deposits NOW accounts $1,550,149$5,921 1.53% Money market deposit accounts 32,100,584 184,752 2.30%Savings accounts 8,191,586 19,521 0.95% Other Consumer TimeDeposits 22,676,841 243,921 4.30% Public Fund CD's of $100,000 ormore 1,476,155 10,313 2.79% CD's of $100,000 or more 9,124,58698,516 4.32% Foreign time deposits 3,555,189 29,632 3.33% TotalInterest-bearing deposits $78,675,090 $592,576 3.01% Senior andsubordinated notes 9,125,017 114,797 5.03% Other borrowings24,851,821 256,728 4.13% Securitization liability 49,317,336518,477 4.21% Total interest-bearing liabilities(3) $161,969,264$1,482,578 3.66% Net interest spread 5.86% Interest income toaverage earning assets 9.52% Interest expense to average earningassets 3.30% Net interest margin 6.22% Managed (1) Quarter Ended3/31/08 Average Income/ Yield/ Balance Expense Rate Earning assets:Loans held for investment $149,719,498 $4,316,294 11.53% Securitiesavailable for sale 21,211,356 257,747 4.86% Other 4,777,704 54,2154.54% Total earning assets (3) $175,708,558 $4,628,256 10.54%Interest-bearing liabilities: Interest-bearing deposits NOWaccounts $3,958,482 $17,714 1.79% Money market deposit accounts29,636,896 211,436 2.85% Savings accounts 8,064,412 24,008 1.19%Other Consumer Time Deposits 18,429,463 204,942 4.45% Public FundCD's of $100,000 or more 1,671,936 15,718 3.76% CD's of $100,000 ormore 8,756,978 99,264 4.53% Foreign time deposits 3,648,797 37,3074.09% Total Interest-bearing deposits $74,166,964 $610,389 3.29%Senior and subordinated notes 10,099,878 140,970 5.58% Otherborrowings 25,449,240 316,249 4.97% Securitization liability49,270,231 583,798 4.74% Total interest-bearing liabilities(3)$158,986,313 $1,651,406 4.15% Net interest spread 6.39% Interestincome to average earning assets 10.54% Interest expense to averageearning assets 3.76% Net interest margin 6.78% Managed (1) QuarterEnded 6/30/07 (2) Average Income/ Yield/ Balance Expense RateEarning assets: Loans held for investment $142,616,011 $4,055,68911.38% Securities available for sale 19,349,938 237,978 4.92% Other6,875,429 86,709 5.04% Total earning assets (3) $168,841,378$4,380,376 10.38% Interest-bearing liabilities: Interest-bearingdeposits NOW accounts $5,115,994 $36,764 2.87% Money market depositaccounts 27,418,203 276,038 4.03% Savings accounts 8,409,684 36,2941.73% Other Consumer Time Deposits 18,494,150 217,700 4.71% PublicFund CD's of $100,000 or more 1,981,883 24,290 4.90% CD's of$100,000 or more 9,609,949 107,491 4.47% Foreign time deposits3,994,639 51,026 5.11% Total Interest-bearing deposits $75,024,502$749,603 4.00% Senior and subordinated notes 9,336,130 134,0615.74% Other borrowings 17,318,770 216,441 5.00% Securitizationliability 50,841,894 666,926 5.25% Total interest-bearingliabilities(3) $152,521,296 $1,767,031 4.63% Net interest spread5.74% Interest income to average earning assets 10.38% Interestexpense to average earning assets 4.19% Net interest margin 6.19%
(1) The information in this table reflects the adjustment to addback the effect of securitized loans.
(2) Prior period amounts have been reclassified to conform withcurrent period presentation.
(3) Average balances, income and expenses, yields and rates arebased on continuing operations.




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CAPITAL ONE FINANCIAL